GST Cuts And Weddings May Lead Festive Season Spending To Rs 14 Lakh Crore

India’s festive economy is set for one of its strongest runs this season. A new report from Bank of Baroda’s Economics Research Department estimates that total consumer spending this festive season, which spans from Dussehra through Christmas and including the start of the wedding period, could range between Rs 12 lakh crore and Rs 14 lakh crore.

The report notes that this sharp rise is related to multiple factors aligning at once, such as the recent Goods and Services Tax (GST) rates reduction across many categories, easing inflation, and the release of pent-up demand which had been on hold earlier this year.

Post GST cuts, prices of several goods have fallen by nearly 10 per cent, freeing up household budgets for discretionary purchases like clothing, electronics, and automobiles.

Weddings, however, are expected to take the biggest share of this spending spree. The report estimates marriage-related expenses alone could reach Rs 4.5–5 lakh crore, as nearly 60 per cent of the annual one crore weddings in India are held between October and December.

The impact of the GST revisions is already visible:

The automobile sector, which saw tax rates fall from 28 per cent to 18 per cent and cess removed, is likely to clock sales worth Rs 1.5 to Rs 2 lakh crore.

Clothing and footwear sales too may add up another Rs 2.8 to Rs 3 lakh crore on the back of a growing appetite for festive and lifestyle purchases across urban and smaller cities.

Electronics, white goods, and household items together could add close to Rs 1.5 lakh crore more.

As per the report estimates, even smaller segments are poised to gain this season, for instance:

• Sweets and confectionery, which are central to festive consumption and gifting could see Rs 40,000 to Rs 45,000 crore in sales

• The travel sector, buoyed by holiday and homecoming trips, is expected to touch Rs 60,000-70,000 crore

Data from google trends, as cited in the analysis report, shows a rise in searches for consumer goods like air conditioners, televisions sets, cars following the recent GST rate cuts.

Authors Aditi Gupta, Dipanwita Mazumdar, Jahnavi Prabhakar, and Sonal Badhan note that India’s economic growth remains largely insulated from global headwinds because it is consumption-driven. 

With GDP growth at 7.8 per cent in the first quarter, and expectations between 6.8-7 per cent for the coming year, the festive sales could serve as a key driver for the second half of financial year 2026.